European markets close higher as investors closely watch political upheaval in France

This was CNBC's live blog covering European markets.

European markets closed higher Tuesday, with investors keeping an eye on political upheaval in France.

The pan-European STOXX 600 index provisionally ended the day up 0.44%, with sectors mostly trading in positive territory. Retail stocks led gains, up 1.56%.

France's financial markets are being closely watched Tuesday after Prime Minister Michel Barnier turned to special constitutional powers to pass a contested budget bill without a parliamentary vote.

Opposition parties on both the left and right say they will back a no-confidence vote to bring Barnier's minority government down. The vote could take place Wednesday. France's CAC 40 index ended the day up 0.3%, having pared back some of its earlier gains.

The Swiss Market Index was little changed after inflation data showed consumer prices rose 0.7% year-on-year in November, just shy of the 0.8% print expected by analysts polled by Reuters.

Overnight, Asia-Pacific markets traded higher, tracking gains on Wall Street after the S&P 500 and the Nasdaq Composite rose to new records overnight. U.S. stocks slipped on Tuesday.

European markets close higher

European markets ended the day higher on Tuesday, with the pan-European Stoxx 600 provisionally closing up 0.44%.

Retail stocks led gains, adding 1.56%, while construction and materials stocks also added more than 1%. Insurance stocks meanwhile fell 0.36%.

After another choppy session, the French CAC 40 index pared back some of its earlier gains to end the day 0.3% higher.

— Sophie Kiderlin

Saxo's chief market strategist discusses the bank's 'outrageous predictions' for 2025

John Hardy, chief macro strategist at Saxo, discussed the bank's annual "outrageous predictions" for next year, on CNBC's "Squawk Box Europe" on Tuesday.

"Trump 2.0 blows up the U.S. dollar" is the one of the bank's predictions. "Yes, on paper we can see why the dollar would grow stronger with tariffs, with deregulation, a superior performing U.S. economy but there are many paths here. Not all paths lead to a stronger dollar," Hardy said.

— Sophie Kiderlin

French CAC 40 index erases earlier gains

The French CAC 40 index erased gains made earlier in the day by around 3:30 p.m. London time, last trading 0.07% lower after having been up as much as 0.8% in morning trades.

French stocks have had a choppy week so far amid political turmoil.

Lawmakers are set to debate and vote on no-confidence motions tabled by the opposition left-wing bloc and by the far-right National Rally party on Wednesday, with the government likely to be toppled then.

— Sophie Kiderlin

South Korean won falls sharply against the U.S. dollar after president declares martial law

South Korea's won on Tuesday fell sharply against the U.S. dollar shortly after President Yoon Suk Yeol declared an emergency marital law.

The U.S. dollar was last seen trading up 1.4% against the won, which notched a fresh two-year low on the news.

Speaking during an unannounced televised briefing, South Korea's Yoon accused opposition lawmakers of controlling the parliament and throwing the country into a political crisis.

Read the full story here.

— Sam Meredith

Stocks open little changed on second trading day of the month

The S&P 500 opened little changed on Tuesday morning.

On the other hand, the Nasdaq Composite slid 0.3%, while the Dow Jones Industrial Average advanced 68 points, or 0.2%.

— Lisa Kailai Han

A look at the biggest gainers and losers on the Stoxx 600 today

By early afternoon trade, stocks seeing the biggest gains on the STOXX 600 included infrastructure group Hochtief and fashion house Hugo Boss, which added 7.5% and 6.7% respectively to their share prices by 1:48 p.m. London time.

At the other end of the index, French payments group Worldline dropped 9.3%.

The stock's nosedive on Tuesday erased some of the gains it made on Monday, after Reuters reported that Worldline had attracted takeover interest from private equity firms including Bain Capital.

Representatives for Bain Capital told CNBC on Tuesday that the private investment firm was "not looking at Worldline or involved in the reported takeover deliberations."

A spokesperson for Worldline was not immediately available for comment.  

— Chloe Taylor

Microsoft faces £1 billion lawsuit in UK for allegedly overcharging rival cloud firms’ customers

Microsoft on Tuesday was accused of unfairly overcharging customers of rival cloud companies in a lawsuit claiming damages of more than £1 billion ($1.27 billion).

The lawsuit alleges customers using Amazon Web Services (AWS), Google Cloud Platform or Alibaba Cloud — all key competitors to Microsoft's Azure cloud — are forced to pay more to license the tech giant's cloud-based Windows Server software on rivals' infrastructure.

Microsoft offers a cheaper price to firms running Windows Server on Azure than on direct competitors like AWS, Google's cloud or Alibaba Cloud. The lawsuit argues firms running the widely-used server software are essentially being overcharged to use alternative cloud computing solutions.

It adds Microsoft leverages its dominant market position in cloud-based server operating systems by extracting higher prices and inducing customers into moving to Azure. Claimant Maria Luisa Stasi, a competition lawyer, is seeking more than £1 billion in compensation for firms affected.

Microsoft declined to comment on the lawsuit.

Read more on the story here

— Ryan Browne

Asian chip stocks shrug off new U.S. semiconductor export curbs

Major Asian chip stocks outside of China rose Tuesday, shrugging off a new round of U.S. semiconductor export curbs aimed at impairing Beijing's capability to produce certain high-end chips.

Taiwan Semiconductor Manufacturing Company — the world's largest contract chip supplier — saw shares rise 2.4%. Several Japanese chip-related stocks also gained. Tokyo Electron rose 4.7%, Lasertec climbed 6.7%, Advantest gained 3.9% and Renesas Electron advanced 2.2%.

Japanese technology conglomerate Softbank, which owns a stake in British chip designer Arm, saw its shares rise 3.6%.

The Department of Commerce announced on Monday that it was curbing semiconductor exports to 140 new companies in its latest effort to limit China's ability to access cutting edge chip technology that could be used for advancing its military capabilities.

Read more on the story here: Asian chip stocks mostly rise, shrugging off new U.S. semiconductor export curbs on China

— Dylan Butts

French debt market still ‘well below’ crisis levels, strategist says

Political instability in France may have put investors on edge — but French borrowing costs are still far from hitting a crisis point, according to one strategist.

In a note to clients on Tuesday, Lindsay James, investment strategist at Quilter Investors, highlighted that the yield on French 10-year bonds stood at 2.9% — around the same level currently returned to investors who lend to Greece, which stood at the center of Europe's 2012 debt crisis.

"But it's important to remember that French borrowing costs are still well below levels that would signify a crisis and also far below the equivalent U.K. rate," she said. "It does however underscore how investors are now reclassifying Paris as one of the riskier borrowers in the eurozone, and there is likely to be further volatility ahead."

France's CAC 40 index gained around 0.5% by 10:50 a.m. London time on Tuesday, as investors anticipate a vote of no confidence in Prime Minister Michel Barnier's government.

The yield on U.K. 10-year Gilts is currently more than 4.2%.

— Chloe Taylor

British retail sales lowest since April

U.K. retail sales fell 3.3% year-on-year in November, according to data released by the British Retail Consortium (BRC) on Tuesday.

November sales came in below the 12-month average growth of 0.5%, the BRC said, and marked the weakest sales figures recorded by the organization since April.

The November reading — which covered the four weeks ending on Nov. 23 — did not include numbers from this year's Black Friday sales, which will be factored into the BRC's December figures.

BRC CEO Helen Dickinson said in a press release on Tuesday that the data was "undoubtedly a bad start to the festive season," with dampened consumer confidence and rising energy costs impacting spending.

— Chloe Taylor

French no-confidence motion to be debated and voted upon Wednesday

Motions of no confidence against French Premier Michel Barnier's minority government will be debated in France's parliament, the National Assembly, on Wednesday.

Two "motions de censure" (no-confidence motions), tabled by both the left-wing bloc and the right-wing National Rally (RN), will be debated at 4 p.m. local time Wednesday, the parliament announced, and the vote on the measures could take place later in the evening.

RN has already said it will support the motion brought by its left-wing rivals but will also support its own motion.

Read more on the story here

— Holly Ellyatt

Russian ruble strengthens against the greenback

The Russian ruble gained ground in early Tuesday deals, with the U.S. dollar shedding 0.18% by 09:43 a.m. London time.

The Russian currency also saw slight gains against the euro.

In recent weeks, a volatile ruble triggered intervention from Russian authorities after hitting its lowest level in more than two years, with sanctions on Moscow in the wake of its full-scale invasion of Ukraine adding pressure to the Russian economy.

In comments cited by Reuters on Tuesday, Russian Central Bank Deputy Governor Alexey Zabotkin labeled the ruble's November decline a "pro-inflationary factor." The central bank is due to assess its monetary policy later this month.

— Chloe Taylor

How the likely fall of the French government will affect the economy: ING comment

France's financial markets are being closely watched Tuesday after Prime Minister Michel Barnier turned to special constitutional powers to push through a contested budget bill without a parliamentary vote.

Opposition parties on both the left and right decided to submit a motion of no confidence on Monday evening, with the aim to bring Barnier's minority government down. The vote could take place Wednesday or Thursday and it's highly likely that Barnier's government will collapse as a result.

France's CAC 40 index traded 0.8% higher Tuesday, despite the impending vote.

The fall of Barnier's government would be bad news for the French economy, ING economists commented Tuesday, coming at a time when Paris must address a public deficit estimated at 6.1% of GDP this year.

"It seems unlikely that France will have a 2025 budget. However, this doesn't imply a shutdown where France can't meet its financial obligations. A provisional budget, likely mirroring the 2024 budget, will probably be implemented," ING economists noted. 

"As a result, it will not be enough to set the trajectory of French public finances in the desired direction and will not respect the commitments made by France to the European authorities. At a time when economic growth in France is slowing markedly, this is bad news. The public deficit will remain high, debt will continue to grow and the next government – whenever that may be – will have an even tougher task to put public finances right."

— Holly Ellyatt

Swiss interest rates could dip into negative territory, analyst says

Commenting on Switzerland's November inflation reading, Kyle Chapman, FX Markets Analyst at Ballinger Group, noted in emailed comments that the Swiss print was now lower than it was in June.

"On a six-monthly basis, the Swiss economy has already slipped deep into deflation," he said. "For that reason, a 50 basis points cut next week remains my call."

Chapman added that he saw the Swiss National Bank — which is due to revisit its monetary policy on Dec. 12 — bringing interest rates down to zero, or possibly into negative territory, by the end of 2025.

"There are a lot of reasons to believe that inflation will remain subdued next year," he said. "U.S. tariffs and political woes pose downside risks to growth in the eurozone, and rising safe haven demand and quicker rate cuts elsewhere should put a floor on the franc."

— Chloe Taylor

Annual Swiss inflation rises less than expected to 0.7% in November

Switzerland's inflation rate rose 0.7% year-on-year in November, just shy of the 0.8% print expected by analysts polled by Reuters.

The country recorded a 0.1% drop in consumer prices from the previous month.

The cooling inflation rate could add pressure to the Swiss National Bank to cut interest rates further, as the institution prepares to make a decision on its monetary policy next week.

The Swiss Federal Statistics Office on Tuesday said that the slight fall in prices was partly attributed to a drop in the cost of hotels, international package holidays and new cars. Housing costs for renters nevertheless bucked the trend with a hike last month, while air transport also picked up.

— Chloe Taylor

Goldman Sachs just refreshed its conviction lists of global stocks, giving 3 over 40% upside

Goldman Sachs has refreshed its lists of top global stock picks for December by adding some and removing others.

The stocks are featured in the investment bank's "Conviction List - Directors' Cut," which boasts a "curated and active" list of buy-rated stocks.

There have also been plenty of additions to the Directors' Cut, including the following three stocks which Goldman gives more than 40% upside potential over the next 12 months.

CNBC Pro subscribers can read the full story here.

— Amala Balakrishner

CNBC Pro: Buy this Canadian dividend growth stock with a 5% yield, Scotiabank says

One of Canada's large financial holding companies appears to be an attractive dividend investment opportunity, according to Scotiabank analysts.

The investment bank believes the value of the dividend growth is "not reflected" in the stock price and is "underappreciated" by the market.

The stock is currently offering investors 5% dividend yield.

CNBC Pro subscribers can read more here.

— Ganesh Rao

S&P 500, Nasdaq Composite close at new record highs

The S&P 500 and Nasdaq Composite both closed at new records on Monday.

The broad market benchmark added 0.24% to settle at 6,047.15. The Nasdaq Composite gained 0.97%, finishing at 19,403.95. On the other hand, the blue-chip Dow Jones Industrial Average lost 128.65 points, or 0.29%, to close at 44,782.00.

— Lisa Kailai Han

European markets: Here are the opening calls

European markets are expected to open higher Tuesday.

The U.K.'s FTSE 100 index is expected to open 18 points higher at 8,322, Germany's DAX up 15 points at 19,922, France's CAC up 29 points at 7,245 and Italy's FTSE MIB up 43 points at 33,601, according to data from IG.

Data releases Tuesday include U.K. retail sales and Spanish unemployment figures.

— Holly Ellyatt